Correlation Between Gulf Keystone and Woodside Energy
Can any of the company-specific risk be diversified away by investing in both Gulf Keystone and Woodside Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gulf Keystone and Woodside Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Keystone Petroleum and Woodside Energy Group, you can compare the effects of market volatilities on Gulf Keystone and Woodside Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gulf Keystone with a short position of Woodside Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Keystone and Woodside Energy.
Diversification Opportunities for Gulf Keystone and Woodside Energy
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gulf and Woodside is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Keystone Petroleum and Woodside Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodside Energy Group and Gulf Keystone is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gulf Keystone Petroleum are associated (or correlated) with Woodside Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodside Energy Group has no effect on the direction of Gulf Keystone i.e., Gulf Keystone and Woodside Energy go up and down completely randomly.
Pair Corralation between Gulf Keystone and Woodside Energy
Assuming the 90 days horizon Gulf Keystone Petroleum is expected to generate 3.27 times more return on investment than Woodside Energy. However, Gulf Keystone is 3.27 times more volatile than Woodside Energy Group. It trades about 0.1 of its potential returns per unit of risk. Woodside Energy Group is currently generating about 0.06 per unit of risk. If you would invest 170.00 in Gulf Keystone Petroleum on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Gulf Keystone Petroleum or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Keystone Petroleum vs. Woodside Energy Group
Performance |
| Timeline |
| Gulf Keystone Petroleum |
| Woodside Energy Group |
Gulf Keystone and Woodside Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Keystone and Woodside Energy
The main advantage of trading using opposite Gulf Keystone and Woodside Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Keystone position performs unexpectedly, Woodside Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Woodside Energy will offset losses from the drop in Woodside Energy's long position.| Gulf Keystone vs. Permian Resources | Gulf Keystone vs. Devon Energy | Gulf Keystone vs. EOG Resources | Gulf Keystone vs. Coterra Energy |
| Woodside Energy vs. Epsilon Energy | Woodside Energy vs. Crescent Energy Co | Woodside Energy vs. Evolution Petroleum | Woodside Energy vs. XXL Energy Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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